Is this unethical?
the letter of intent isn't legally binding, so its just a way to gauge business interest.
i mean, i'd be willing to sign a non-binding LOI if it meant someone would make use of it to independently develop an application that i would find beneficial.
You keep talking to him/her and 6 months later the app shows up and it is a piece of crap (not as advertised). The customer doesn't buy it. Yet, you have stolen 6 months of valuable time from the customer which he could have used on productive things (or searching for another app that meets his needs).
Not illegal but definitely unethical.
1) if i were in the shoes of the customer, and i didn't have a prototype in front of me, i'd either ask for one or assume it didn't exist.
2) how is this different from posting up a splash page asking for email addresses for a future public release?
3) is the false impression the only thing that matters to you? if they instead implied that they were designing it and there was no implication of cut code or working prototypes, would that make this somehow a better situation in your eyes?
You really don't see how lying to a customer's face about having code written is different from putting up a splash page saying something might exist in the future?
i'm not really here to agree with how they went about doing things with respect to how they claim to have pitched the product.
the process that they took would work the exact same if they were completely upfront about what they were doing, though, and i think its worth learning from.
I think it becomes unethical when you begin lying: "Production of the app is coming along nicely! Here are a few more screenshots from development this week."
So the question might be more accurately: do you position this so you don't have to lie to a potential customer, but have them assume it exists? Is that positioning unethical? What do you say if they ask you point blank?
Of course not, if you disclose that it's unrealized.
Is pitching you an idea for a company in trade for your money wrong?
Of course not, if you disclose that it's an idea.
I think it becomes unethical when you begin lying
Which they were doing. They have your example of what would cross the line almost verbatim: "Each time we would come back with a few more 'screenshots' and tell them that development was progressing nicely and ask them for more input."
How do you position this so you don't have to lie to a potential customer, but have them assume it exists?
You don't. Creating the impression it exists when it doesn't is the unethical part. Why not just be up front with your customer and win them over with your design, insight, and ability to turn around real prototypes?
With just a little other investigational programming on the side, everything in their presentations would have been truthful, to the level of detail that a customer cares about.
It is, but that's not what they were referring to.
With just a little other investigational programming on the side, everything in their presentations would have been truthful, to the level of detail that a customer cares about.
Which is a big reason why I think it's unforgivable that they chose to lie instead. They crossed a brightline in their relationship with their customer without any real benefit from doing so.
Sounds like lying to me.
edit: removed HTML.